Mexico factories returned to modest growth in August-PMI

MEXICO CITY, Sept 2 Mexico's manufacturing
sector grew slightly in August, rebounding from its first
contraction in more than two years, driven by rising output and
new orders, a survey showed on Monday.

The HSBC Mexico Manufacturing Purchasing Managers' Index
(PMI) rose to 50.8 in August after adjusting for
seasonal variation, from 49.7 in July.

A reading above 50 signals expansion, but the monthly
reading was still the second-lowest since the series began in
April 2011.

"We maintain our view that the economy will gain momentum
[in the second half of 2013], although at a slower pace than
expected previously," said Sergio Martin, Chief Economist at
HSBC Mexico.

Factory output and new orders also increased in August but
at a sluggish pace, while new export orders continued to
contract in Latin America's No. 2 economy.

Factory exports make up about a quarter of Mexico's GDP and
shakier U.S. demand and weaker government spending is seen
pushing down Mexico's growth this year.

Mexico's economy contracted for the first time in four years
in the second quarter, prompting the government to slash its
growth outlook for 2013. However, the finance ministry expects
growth to pick up in the second half.

The PMI index, compiled by Markit, is composed of five
sub-indices tracking changes in new orders, output, employment,
suppliers' delivery times and stocks of raw materials and
finished goods.